Evergrande rated ‘restricted default’ by Fitch after missed payment

Fitch became the first rating agency to declare China’s Evergrande foreign bonds the default after the world’s most debt-ridden developers failed to pay significant interest this week.

This announcement was the most important moment ever for developers. Marathon liquidity crisis It has spread to other companies across the country’s vast real estate sector, fueling global concerns about its potential impact on China’s economy.

Evergrande, with over $ 300 billion in debt, I missed the deadline on Monday Repay a total of $ 82.5 million in bond coupons. According to people familiar with the matter, the group had not yet sent money in New York as of Wednesday.

Fitch said the company did not respond to a request for confirmation regarding the payment of the coupon and therefore assumed that the coupon was not paid.

Neither the company nor the Chinese government have confirmed that Evergrande has defaulted, but the company said on Friday.No guaranteeHaving entered the restructuring process with the support of the local government, we may be able to handle debt repayment.

Fitch also said Thursday that another heavily debted developer, Kaisa, Failed to repay $ 400 million bond Those that matured on Tuesday were restricted by default. A person familiar with the situation said Kaisa was about to sign a nondisclosure agreement with an investor adviser.

Evergrande’s debt crisis has been fixed for months International bond marketCompared to Kaisa’s $ 12 billion, it borrows a lot and has a balance of about $ 19 billion. Evergrande has Missed the series From late September, but until this week, we avoided the default by sending funds before the 30-day grace period expired.

Separately, on Thursday afternoon, the People’s Bank of China’s Yi Gang said at a seminar in Hong Kong that the failure of the Evergrande Group to meet its obligations is a market event and investor rights will be respected. Told.

Central bank on Monday Unleashed $ 188 billion The influx of liquidity into the financial system to offset the anxieties caused by the Evergrande debt crisis.

Group chair Xu Jiayin Land, an urban redevelopment project in the Pearl River Delta, a prosperous southern region of China around Hong Kong, and the company’s Property management unitAccording to people who are familiar with the problem.

“Hui can’t sell Evergrande’s most valuable assets at a good price because everyone knows he’s under stress,” said one close to Chinese financial regulators. As long as it doesn’t happen, “he said.

Evergrande is also Support for more state banks In the last few weeks, it will help you avoid operational disruptions.

The developers said they had credit negotiations with the provincial government, according to two sources close to negotiating with local government officials, to homebuyers and government officials in the two provincial capitals, Wuhan and Nanning, which have stagnated the project. He said he was inside.

Evergrande did not respond to the request for comment.

On November 22, a representative of Evergrande in Wuhan said the company applied for a business loan from a state lender and supported the business there, according to the minutes of the Financial Times.

“If our loan application is approved, we will consider paying our suppliers if we complete an ongoing project,” said an executive.

On Monday, Hui said the group would form a new risk management committee, with state representatives occupying four of the seven seats.

Evergrande has about 800 projects across China, many of which are funded by prepaid homebuyers.

The local government has ring-fenced homebuyers’ deposits and other funds to ensure that the Evergrande project in their jurisdiction is complete and the contractor makes payments on time.

Group’s central role in the Chinese real estate market Brings serious political risks He emphasized the urgent need for new funding for officials tasked with managing restructuring.

In September, a group that failed to pay for wealth management products purchased by individual investors triggered protests outside the Shenzhen headquarters.

Evergrande rated ‘restricted default’ by Fitch after missed payment Source link Evergrande rated ‘restricted default’ by Fitch after missed payment

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